The impact of competition on entrepreneurism

Last May, a new Australian incubator said they were different from StartupBus, the “people accelerator” (which I call a foundry — more on that another time) that we’ve been building for over two years now.

…the Startup Bus concept – which is essentially a start-up competition – is flawed when it comes to women….”The whole approach seems to be based on a kind of testosterone, pump”

It was an interesting point because I’ve often thought about not just how to encourage more female entrepreneurs, but more successful startups. Is a competition a way to do that?

When we ran the StartupBus Americas competition this year (840 applicants, ~270 accepted), we had a lot of upset participants. Several in particular spoke to me personally about how they didn’t understand why their team and product didn’t make the finals. One of the teams who I actually personally believed should have won the competition (but never made it past the semi finals) wrote an email thanking us (I’ve appended it at the end of this blog post, to not distract the point I’m trying to make) which I forwarded to all the participants, to which I added

With emails like this from Raymond (below), the real winner of StartupBus makes me think is Wastebits.

As Greg (Florida conductor) says: StartupBus is harder than a real startup. If you can survive this, you’ll find a real business a walk in the park.

Well done everyone, I was so proud to hear last night how many of you are continuing on with your projects. There’s something to be said true entrepreneurs are ones that break the rules (I actually smiled to hear people ignored some milestones to focus on product) and don’t let stupid things like validation (ie, the competition) get in their way.

Three months on, what’s the verdict? Still too early to tell but this week, a talented designer  Scott (who actually designed the new StartupBus logo) sent me an email saying that he was working with the Wastebits team, which has become a real business. Another team that stood out for their quality (and actually was a business idea I looked into years ago) but didn’t make the semi final — Get Wished — I’ve been hearing how they are still working on their product with serious commitment. And today, Sohail (who I convinced to turn down a job at Google so he would work at a startup) paired up with James (who was on the first StartupBus) had a post on TechCrunch announcing Hiptype who have been part of the current Y-Combinator batch — which other than credibility and exposure, also means a guranteed $150k in funding. The product the post talks about was actually launched on StartupBus this year (original video seems to be down), but they didn’t make the semi finals.

That last sentence being key. James in particular was upset in how he didn’t make it the semi finals, and caused quite a dilema for me personally because I liked their product, I knew the team members well, and I wanted them to succeed. A dilemma because we had to create a process to bring down the 50+ products to ultimately one winner and it made me question our approach which was entirely my responsibility. But the dynamics of the competition forced outcomes that even I didn’t necessarily agree with.

Is a competition the best way to select winners? Nope. But is a competition process, whereby people miss out and they want to prove something, the best way to create winners?

Time will tell, but something tells me yes. True entrepreneurs break rules, want to prove people wrong, and don’t give up. As it was explained to me by my previous boss: ruthless ambition is what creates entrepreneurial success. And the resentment of not being selected, may ironically be the best way to feed that ambition.

On a related note consider this: I’ve been observing how some of the best entrepreneurs I respect (admittedly, only men but then again there’s only a few people I truly respect) all seem to have what I call ‘daddy issues’ that they acknowledge as what drives them. Not big family problems, but just didn’t see eye to eye and a sense of having to prove themselves.

Addendum: As promised, the email from the Wastebits team this March that I forwarded to all participants. There’s a lesson in there for what incubators really should be doing.

Elias
Thank you and the StartupBus team for an incredible experience. In my humble opinion, StartupBus has innovated THE new model for entrepreneurs.
StartupBus is the epitomy of iterative adaptation and flexibility…adaptation–>the single most important factor in determining the survival of a species (adapted from Darwin).
StartupBus IS the MBA for entrepreneurs!
StartupBus creates a unique immersive experience for entrepreneurs to LEARN THROUGH DOING. There are no bystanders!
Plain and simple, graduates of StartupBus (*hint* *hint*) are well prepared to be successful bootstrappers. And even more importantly, these graduates are well informed to spread the StartupBus aspirational philosphy AND continue building that sense of community.
Wastebits came into being BECAUSE of StartupBus … it was nothing more than an un-named idea two weeks ago. StartupBus provided the environment and super-charge for a team of aspirational entrepreneurs to breath life into that idea. And now today, a meer 7 days since last Tuesday’s kickoff…Wastebits is an incorporated company, with an awesome brand, a team of senior developers, a team of industry veterans committed to forming the management structure, scaling and supply chain partners (Blackberry expressed high interest just yesterday to support Wastebits premiering via a mobile rollout), AND, most importantly, a bonefied base of PAYING CUSTOMERS (we received our 3rd Letter of Intent this morning!).
StartupBus is what enabled this to happen…happen in less than a week!
THAT is a story.
And yet, I find myself highly curious how we as the StartupBus community will achieve EVEN MORE for 2013?!?
The future is ours to envision and create. Everything is possible when the right people are connected! That is what StartupBus re-affirmed for me.
Thank you for the experience and the opportunity to join such an incredible community.
I look forward to being a part of creating the vision for StartupBus 2013!
Humbly appreciative,
ray

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